Final answer:
The PBSA affects pension plans by requiring contributions to the Pension Benefit Guarantee Corporation, penalizing underfunding, and improving transparency for employees. It has also influenced the transition from traditional pensions to defined contribution plans like 401(k)s.
Step-by-step explanation:
The PBSA, or the Pension Benefit Security Act, outlines criteria that must be met within pension plans; the areas that primarily impact payroll concern the funding and reporting requirements. Employers offering pensions must pay a fraction of what they set aside for pensions to the Pension Benefit Guarantee Corporation. This organization ensures that some pension benefits are covered in case the company goes bankrupt. Additionally, the PBSA penalizes firms for underfunding their pension plans and grants employees greater transparency about their pension accounts. The shift from traditional pensions to defined contribution plans like 401(k)s and 403(b)s has altered the landscape, yet the principles dictating pension insurance remain crucial for retirement security.